Another day, another person who has had their pay cut. Let’s see. I think that’s 4 or 5 people I know who have had their wages cut 10% or more (either direct cuts, or unpaid days off). Meanwhile, I read this in the news:

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

Executives (the C-levels of the world) are taking in a full 1/3rd of wages. Amazing.

And how about those living expenses? Those went down too, right–right? HA HA HA. My gas is going up. My electricity is going up. My garbage is going up. My food is going up. My rent is going up (due to huge 12% increases in real estate taxes in Austin this year). I have no heath insurance because it’s too expensive, and pay more in MEDICINE than I do in food.

A couple of thoughts:

• If you aren’t thinking of yourself as a “gun for hire” you should be. The days of reliable long term employment are over (they never really existed anyway). We are all independent contractors.
• Employers are not your friends. It’s business. They will try to get the most work out of you for the least amount of money.
• In this economic environment, you will get taken advantage of. Again, more hours and less pay. Don’t like it? They don’t care, with real unemployment at +15%.
• Work is work. Unless you are running your own business, you are sweating to fill someone else’s wallet. That’s fine, and the world we live in, but don’t forget it.

In other words: Nothing ever changes. You could apply those four thoughts to a Great Depression era worker, to a 19th century child textile worker, or to a cube farm.

Steps for improvement:

• Direct cuts in pay, without reductions in hours, is not effective. It just strains people more, without giving them anything in return.
• If you are going to cut payrolls, go the unpaid days off route. It’s still a pay cut, but the employee is getting time in return. This I see as a potential opportunity — perhaps you have time to start your own side business, or simply focus on something other than work.
• Enough with the tax increases. You can’t keep raising taxes just to maintain the status quo. I wouldn’t mind paying higher taxes, if I got something good out of it.
• Instead of cutting services, think in new ways. How about getting people to volunteer their time so that the library can stay open?
• Realize that every other first world country has universal healthcare, and that the U.S. should also. This is simply one of those “greater good” concepts. It’s as Socialist as a fireman–you think firemen are a good idea, right? Socialist! I’ve seen too many people NOT go independent because of healthcare worries. How many small businesses never got started because people were afraid of losing benefits? A lot, I’d wager.
• Small businesses are where jobs get created. Do everything possible to support their incubation, birth, and growth.

For those of your directly affected by this “economic downturn” (just say it: depression) — which means all of us — a couple more bullet points:

• Being out of work is becoming normalized. So many people are out of work that being “between jobs” no longer carries the stigma it once did.
• Quit whining and move on. I’m living this right now. Times are lean, but I’d rather be living off my savings than being miserable at a company I don’t respect.
• Beware of hyperopia. If you worry too much about what is going to happen in a year, you’ll miss the life happening around you right now. Working long hours seems like a good decision now, but look back in a couple of years and see if you regret it. (There is a good short article in the Wired 17.80 on this concept — it helped me to understand my own hyperopia.)

On last thought I’ve been pondering lately. There is an old phase that goes: “Sell to the classes, live with the masses. Sell to the masses, live with the classes.” Meaning that if you want to get rich, sell a million $1 widgets instead of one $1,000,000 yacht. I’ve seen successful businesses go both ways. Some people make money selling a lot of a iPhone app. Some people make money selling to only Fortune 100 companies. What has been your experience? Is the middle ground best? Sell the Echo and the Lexus? Something to ponder, as a small business owner.